Is UAC really broken in Windows 7?

OK, so everywhere I turn I am hearing people ridicule the changes in how UAC behaves in Windows 7. There is even proof of concept code that can turn off UAC without even being prompted.

For those with their heads in the sand, the story goes that in Windows 7 the default behaviour for UAC is to “Notify me only when programs try to make changes to my computer” and “Don’t notify me when I make changes to Windows settings”. Because UAC is a "Windows setting", it means you can disable UAC without being prompted. And people believe that due to this behaviour, UAC is broken.